I'd probably say there instead of a Challenge Mode and a Relax Mode like you said, it could just be a combined mode where there is a timer but after it goes out it simply continues the game on Relax Mode.

Or alternatively every word still has the timer and then at the end if you finish, it tells you how many words you completed under the timer and gives you a score based on that.

And then maybe an option for those who don't want the timer to show at all, since maybe it adds a bit of pressure. You can have just a simple option that removes the timer entirely from view